Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
Please note that all times are shown in the time zone of the conference. The current conference time is: 30th Sept 2023, 08:10:38am CEST
Open Banking and Customer Data Sharing: Implications for FinTech Borrowers
Rachel J. Nam1,2
1Goethe University Frankfurt; 2Leibniz Institute for Financial Research SAFE
Discussant: Matthias Efing (HEC Paris)
With open banking, consumers take greater control over their own financial data and share it at their discretion. Using a rich set of loan application data from the largest German FinTech lender in consumer credit, this paper studies what characterizes borrowers who share data and assesses its impact on loan application outcomes. I show that riskier borrowers share data more readily, which subsequently leads to an increase in the probability of loan approval and a reduction in interest rates. The effects hold across all credit risk profiles but are the most pronounced for borrowers with lower credit scores (a higher increase in loan approval rate) and higher credit scores (a larger reduction in interest rate). I also find that standard variables used in credit scoring explain substantially less variation in loan application outcomes when customers share data. Overall, these findings suggest that open banking has the potential to improve financial inclusion, and also provide policy implications for regulators engaged in the adoption or extension of open banking policies.
Consumer Surveillance and Financial Fraud
Bo Bian1, Michaela Pagel2, Huan Tang3
1University of British Columbia; 2Columbia Graduate School of Business, NBER, and CEPR.; 3London School of Economics and CEPR
Discussant: Guillaume Vuillemey (HEC Paris)
These days, companies near constantly surveil their customers to collect, analyze, and profit from their private information. However, the market for private data, lax data security measures, and security breaches expose consumers to financial fraud. Exploiting Apple’s App Tracking Transparency policy, which greatly limits the tracking and sharing of personal information on the iOS platform, and granular variations in iOS user shares across the US in a difference-in-differences design, we estimate that if 10% more people disallow tracking, the number of financial fraud complaints decreases by approximately 2.84%. This decline is concentrated in financial fraud complaints about firms that engage in intensive consumer surveillance and lack data safeguards, which confirms the mechanism. Our evidence quantifies one of the main costs of lax data security standards.